Who Wants the Maharlika Wealth Fund?

Labor is against it.  Business (such as Makati Business Club, Management Association of the Philippines, Financial Executives Institute of the Philippines) is against it.  Civil Society Organizations (the thinking ones, anyway), are against it.  Academics (especially economists) are against it. Former Supreme Court Justice Antonio Carpio wrote a detailed legal opinion against it. The economic team of the President – or rather, BSP governor Philip Medalla  – the rest were silent on the matter, which meant, they’d rather the whole thing go away quietly — were against it. At least until Friday morning.

In favor of it are the proponents of the bill, namely Speaker Martin Romualdez, his wife, Tongon Party-list Representative Yetta Romualdez (see how the party-list concept has been distorted beyond recognition), Sandro Marcos (the President’s son), the second Tongon Party-list Representative, the House Majority Floor Leader, and Stella Quimbo, the representative from Marikina.  

Put another way, of the six authors of the bill, three belong to the Marcos-Romualdez clan, two are Marcos-Romualdez hangers-on. The outlier is Quimbo, whose role seems to be to deodorize the bill (she has a PhD in economics), or the one who gives the bill its aura of respectability. 

I watched Quimbo (as the representative of the Congress leadership – see what I mean?) reading the statement about the decision to remove GSIS and SSS as sources of the initial capital of the Maharlika Wealth Fund (MWF) and substituting for it the profits of the BSP (Bangko Sentral ng Pilipinas). While doing that, she also let fall that the MWF bill was drafted by the economic managers. 

Let’s take these one by one.

1. The Funding

The GSIS proposed contribution was P125 billion. The SSS’ was P50 billion.  Or a total of P175 billion.  Congress will replace that with profits of the BSP. Sounds great, yes?  NO.  BSP profits last year were only P31 billion: It’s revenues were P166.98 billion and expenditures were P136.01 billion.  How does P31 billion substitute the P175 billion?  

Obviously, the Maharlika Wealth Fund is not going to start with a bang but with a whimper.  And that does not seem to faze the authors of the bill. 

 From initial capitalization of P250 billion (The GSIS and SSS, plus LBP and DBP to contribute P50 billion and P25 billion, respectively), down to an initial capitalization of P106 billion. This is a decrease of almost 60%.  

Even with a national government contribution – taken from the budget – of P25 billion, the total capitalization of the fund will be P131 billion. About US$2.4 billion.  For context, Indonesia’s sovereign wealth fund, INA, was started with a US$5 billion contribution by the national government.

2. Authorship

Then, there is the statement that the economic managers drafted the MWF bill.  This I find incredible.  

First, because since the s..t hit the fan on the issue, I heard nary a word in defense of the MWF from either Balisacan (NEDA), Diokno (Finance), or Pangandaman (Budget).  Medalla (BSP) already said his piece against it, which none of his colleagues contradicted.  

Second, Joey Salceda, in his campaign to sell the MWF, never breathed a hint that the President’s economic team had drafted the bill. I had the impression that it was he who drafted it.

Now, all of sudden, the above four economic managers have issued a statement in favor of the bill, urging its immediate enactment, all warm and fuzzy and grateful to the legislature and the President.  

I’m not buying it, Reader. 

It is written in such a brown-nosing manner that screams that the author is a paid hack of the Speaker and his congressional associates. That could not have come out from the mouths or pens of Balisacan and Medalla, both of whom I have known and interacted with for the past thirty or forty years. Pangandaman I do not know at all, but she is much too junior a member of the economic team, and much too much a UP School of Economics alumna to use such subservient language. 

Second, why only now?  Why not when it was first introduced in the House of Representatives last Nov. 28?  

So this is what I think happened:  with public opinion so much against the bill, and with Stella Quimbo not being able to lend enough credibility, the proponents of the bill decided to get the economic managers behind them. I am so sorry to say that it took only one meeting for the economic managers to acquiesce.

But, whether they wrote it or not, the brutal truth is that they signed it.  

It is a sad day.  My only consolation is that nowhere in that letter does it mention that the signatories had anything to do with drafting the bill.

 Small comfort, but comfort anyway.